On Monday, I speculated that oil prices may be subject to a bubble rather than real fundamentals. Sure enough, oil prices has fallen back to $126/barrel from its high of $134/barrel based partially on the belief that the prices are not warranted based on supplies and retail demand. I will continue to blog on oil prices as it is becoming the personal finance issue this year.

Without further ado, our regular guest columnist, Mom2KG, is back to update you on how her family is doing in meeting their personal finance goals.

Thank you to all who posted with suggestions on my budget and angst last month. There was a general consensus that there should be fun money, or a slush fund, the spending of which is free of guilt and restrictions. Setting this aside in the budget is a great idea. I was also relieved to hear about food costs being out of control for everyone. (It’s not just me!) There was also a post about averaging the fun money spending over a few months, rather than focussing on the pennies month to month. Thanks again.

Tax time – that was a good experience for me. I work on contract. My husband nagged me all through 2007 to put away money not just for GST remittances but my own taxes and deductions. My accountant did some fancy work in getting my taxable income down, and it turned out we had calculated the tax pretty well – in fact I had money left over. However, my husband was hit with a much bigger tax bill than we thought (something about allocating a bonus for 2008 but it still being taxed in 2007). So his nagging paid off, just not where we thought it would.

In other news, I also negotiated a raise for the first time ever. (I actually have two jobs, the contract one and a part-time permanent one. The raise was for the PT one.) I had not gotten a raise in four years (the company is cash-strapped, blah blah) so it was time. I got a whole speech ready, got my negotiating hat on….and got exactly what I wanted! I felt pretty good about that. I was a bit confused though – I gave my boss an opening number, and he asked “What’s your real number?” I thought he meant my bottom line, which I told him (and got). He said I should have given him a higher number as my “real number” than the opening gambit. Anyone know what he was talking about?

I’m also thinking about taking a new job. It would involve a significant raise. But there are downsides – I have a pretty good situation now where I can spend time at home if needed (e.g. a sick child), and my Fridays are a half-day of work at most. This is pretty sweet! The new job would still have predictable, reasonable hours, but would mean more work and less time at home, and certainly less flexibility. But then again, more money means hitting our financial goals sooner (which are a big priority, and will translate into more freedom). So let me pose a question – does everyone really have a price? How important is making more money, especially when we’re already reaching some lofty goals?

It is reporting season for the banks; historically famous for service fees, cozy hours and annual dividend increases. But should you be worried if your bank, or any stock for that matter, doesn’t increase its dividends when it is regularly does? It depends. In the absence of context, a dividend increase is a good thing. It means the company is making money and has free cash flow to increase its dividend. An annual dividend increase also means that management is confident in the business going forward because it can absorb increased dividend payments to shareholders.

Conversely, a business that halts an annual dividend increase after years of making them is usually a troublesome sign. Is the business running short on cash? Are creditors pounding at the door? Is this the beginning of the end?

Context is everything in life. In some cases, a stock which doesn’t increase its dividend does not necessarily equate that the sky is falling. Could a lack of a dividend increase actually be a good thing in some situations?

1. Yes, when the cash normally used to increase dividends is being used to expand the business. Take the case of TransCanada Corporation. TransCanada announced in March that it would be acquiring a substantial generating station in Queens, New York for $2.8 billion. Analysts believe, given the size of the deal, TransCanada will not be increasing its dividend any time soon (time will tell). But is this really so bad if, in the long-term, the integration of this generation station will mean more free cash flow to increase dividends aggressively in the future? Pipelines are heavily regulated industries with prices set by governments. The result is that profit margins get squeezed over time (after all, the government needs to be perceived as keeping energy prices low) and, as a shareholder, I would rather have TransCanada use some cash now to expand the business than let its business decline over time (and, yes, I added to my position in the bought deal at $36.50/share).
2. Yes, when the industry faces a great deal of uncertainty. RBC was taken to task earlier this year for not increasing its dividend in the midst of the liquidity crisis caused by ABCP/sub-prime mortgages (I am a shareholder of RBC). However, remember RBC didn’t make $5.4 billion in profits last year without knowing a thing or two about growing a business and managing risk. A temporary halt to dividend increases to an industry in flux is a good thing if it gives financial flexibility to ride the crisis out or to buy out a competitor on the cheap. Those who criticized RBC for not increasing their dividends also over-looked the fact that RBC made $4.5 billion worth of acquisitions in fiscal 2007; it was using its free cash to expand. Cash is king in a crisis. It allows you significant breathing space and buying opportunities so why limit yourself financially by increasing the dividend? There’s also some interesting speculation about RBC- it didn’t increase its dividend and has quietly raised over $1 billion in new financings (mostly through preference share issues)- what is it stock-piling cash for?
3. Yes, when your competitors are expanding and you need to keep up. Pfizer Inc., the world’s largest pharma company, has a dividend yield over 6.5%, hordes of cash and keeps increasing its dividend (I am a shareholder of Pfizer). But it is subject to heavy criticism from analysts. Why? Phara is a research intensive industry- someone is always researching the next big thing in this industry and if you don’t pour your free cash into more research and development, over time, your competitive edge will erode. In Pfizer’s case, this is doubly the case since all their big drugs are coming off patent protection and they need to find other drugs to take its place. I read that Pfizer now spends more on marketing than R&D. Not a good thing in this industry. In very innovative or research intensive industries, your free cash could be utilized more efficiently by keeping one step ahead of your competitors than paying large dividends. This is why even large, established technology companies don’t increase dividends that much- they need the cash to find ways to keep ahead of their competitors.

Dividends increases are a double-edged swords for companies. They attract a lot of shareholders like you and me but it is a fine balancing act between increasing dividends to keep shareholders happy and using free cash to expand the business (which is why the dividend payout ratio has to be tracked carefully). In situations where the business needs to expand, the industry is in flux or the competitors are investing large amounts of money to beat you, a dividend increase may actually set a business back in the long-run.

A mechanical cry to increase dividends year after year, in some cases, is really a penny wise, pound foolish strategy. This is why it is important to know what you are investing in so you can make a proper determination if a lack of a dividend increase is a sign to buy or sell.

Statistics show that the over-whelming majority of mutual funds under-perform the general stock market index; a study found 78% of actively managed mutual funds lagged the Vanguard 500 Index fund (which tracks 500 large cap stock in the U.S.). Why? The explanation usually given is that mutual funds, even high-flying ones, eventually “revert to the mean” and perform just like the rest of the mutual fund sector. However, “reversion to mean” glosses over the structural issue that the mutual fund industry faces in matching or exceeding the general stock market indexes and gives further credence to the growing chorus of experts advising you and I to simply buy an exchange traded fund which tracks a broad based stock index(es).

The first structural issue is, quite simply, very relatable to anyone who works in a large organization. Large mutual funds work by committee and committees tend to make the safest decision and not the best one. When a mutual fund is small, the fund manager can still wrap their mind around what to invest in, when and for how much- the fund manager has a pulse on the industry. However, small mutual funds which do well become big mutual funds and, suddenly, the fund manager cannot look after the day-to-day operation of the mutual fund.

Investment committees have to be formed and, in my experience, most committees take middle of the road decisions rather than the correct one no matter how technically gifted the committee members are (the over-riding principle to such decision-making being CYA- cover your as*). Thus, big mutual funds become closet index funds- because that is the safe choice to make (and why pay the MER to have a closet index fund?)

The second structural issue is qualitative in nature. In the finance lingo, mutual funds don’t buy stocks, they take positions. When a small mutual fund takes a position, its position, in real dollars, is relative small (a small mutual fund may have under $1 billion of assets under management- remember we are talking about things being relative here; the largest mutual fund in the U.S., American Funds’ Growth Fund of America, has over $162 billion under management as of 2007). It can buy and sell without affecting the price of the stock being bought or sold greatly.

Now consider the plight of a large mutual fund (now we are talking about mutual funds with over $10 billion of assets under management) which we will call Acme Mutual Fund. Acme Mutual Fund has $10 billion assets under management (which would not even make into the 50^th largest mutual fund in the U.S.- not even close) and wants to invest a mere 2% of the fund, or $200 million dollars, to buy stock in ABC Co.

What effect do you think Acme Mutual Fund would have if it bought $200 million worth of stock at one time? Of course, the stock price would go up. To mitigate that effect, it tries to buy over time but you still have $200 million going into one stock over the short to medium term which tends to push the price up (or an enterprising investor finds that Acme Mutual Fund is taking a position and starts buying as well). In effect, the mutual fund is bidding against itself and buying positions for more than it should. Consider the Buffet effect- what happens when Buffet takes a position in a stock? It immediately goes up, making it harder for Buffet to add to his position at the same price.

Consider the other side of the equation, when Acme Mutual Fund needs to sell a stock/position. Now you have the opposite effect, you can’t dump $200 million worth of stock on the market without creating a drop in the stock price. Thus, you do the same thing again- you try to sell in dribs and drabs to ensure the stock price doesn’t fall completely. But, you have the same effect occurring. The market sees that there is a lot of selling going on and that supply exceeds demand in a stock meaning a drop in the stock price.

In effect, Acme Mutual Fund is getting in its own way; when it buys, the price goes up and when it sells, the price falls. It is getting the short-end of the stick both ways because it is a giant with clay feet.

Think about that the next time, an investment advisor recommends you invest in a large mutual fund because large mutual funds are safe. The Titanic was a big boat too.

Perhaps this topic seems self-evident with the answer being “any offer in a down real estate market is a good offer.” However, real estate has a very emotional attachment to its owners and, despite what the real estate market indicates, vendors will fight you tooth and nail on price because they think their house is different and the normal laws of supply and demand do not count. I am not going to address buying houses on foreclosure; this is another topic altogether. But, real estate and reality sometimes don’t go hand and hand so a few things to remember if you are shopping for real estate in down markets.

• Get your own real estate agent. Don’t let the vendor’s agent talk you into representing both of you with the lure of a lower commission rate. This is a penny wise, pound foolish philosophy. A real estate’s agent primary motivation is to make as much commission as possible- its not a judgment against the industry, it is just part of the business model and nothing personal. Thus, any agent representing both sides will not want you to drive a hard bargain and get the best price on real estate.
• Forget comparables, its all about the absorption rate. Real estate comparables really don’t mean much if the fundamental assumptions underlying the comparables have shifted dramatically. In real estate markets in parts of California or Florida, a comparable from 6 months ago has just as much use as one from 1989; the market has changed so much you have to rely on absorption rates. An absorption rate is a metric real estate developers like to focus on but a real estate purchaser can use in a down market. Quite simply, an absorption rate measures how long it takes to sell off excess real estate inventory. If, in the last 3 months, the local market sold on average 100 home/month and there are 1000 listings on MLS, your absorption rate is 10 months (1,000 listings/100 homes sold a month) or it will take 10 months to sell off excess inventory. 6 months is generally a balanced market. The higher your absorption rate, the better off you are as a purchaser since this indicates that supply outstrips demand and the negotiations on price become easier (“there’s 10 months supply of housing on the market. I don’t have to pay a premium for your home. There’s a lot just like it on the market…”). If you hired a real estate agent who has been through some down markets, they know how to shift the analysis from comparables to absorption rates and negotiate accordingly.
• Have your financing pre-approved. The fall-out from the sub-prime/ABCP debacle is that it is tough to get financing now so even if someone outbids you, they may not get financing. Waiving your financing condition knowing you have it in hand makes your bargaining position stronger even if you come in with a lower price (“…sure the other offer is for $5,000 more but I have no financing condition and they don’t. If you take their offer than I am walking away and if their financing fails, I am not coming back so take the bird in the hand…”)
• Patience is key. It takes a long time for people to acknowledge their home isn’t worth as much as they thought. The first listing price may take a while to lower as reality sets in. Have your real estate tag a few desirable but over-priced homes. Inspect them and visit them but don’t make an offer. If your real estate thinks it is over-priced, other real estate agents have advised their client of the same thing. When the price get down to a desirable level, pounce. Since you have already seen and inspected the home, you have done the majority of your due diligence already.
• Be realistic. Certain types of real estate will always hold their value: homes in University towns, upscale enclaves and starter homes in the central city (as opposed to in the boons). The prices tend to hold up and the price decrease is not going to be that great. The great bargains are in cookie-cutter condos, large homes in the boons, over-developed subdivisions (look for lots of for sale signs). Make sure you apply a contextual analysis if you are bargain hunting.

Best of luck.

The Toronto Stock Exchange Composite Index, which is a de facto proxy for commodity prices if you removed RIM and the financial stocks, hit over 15,000 recently due in large part to the run up in oil prices to over $130/barrel. Several analysts have now hopped abroad the “here comes $200/barrel” train in recent weeks. The argument for higher oil prices is pretty simple: China and India are going to need more demand for oil and there isn’t a corresponding supply to feed it. While I am a supporter of the peak oil theory, the cynic in me wonders if this isn’t the third great bubble forming in the last 10 years after tech stocks and real estate.

Remember that money is very cheap and the Federal Banks keep injecting money into the system- essentially, none of the brokerage houses are playing with their money anymore. It is yours and mine they are playing with in the form of bailout money. With bank stocks having attracted the koodies, there’s nowhere to put cheap money but in oil and commodity stocks and, hence, a run-up in price but is the run-up justified?  While I do believe that energy prices will continue to go up, should it really go up this fast? I point to three different factors why oil is bubbly to me:

1. Analysts assume that consumption patterns will remain the same as prices increase and rely on the assumption that China and India will have North American consumption patterns. I take Peter Lynch-esque view to oil. On main street, we are already beginning to see the effects of high oil prices. No one in my circle of friends is buying SUV’s anymore; people are looking at diesel cars or smaller and more fuel efficient cars. Ford admitted that the SUV is a trend that’s now past. Most people I know aren’t flying to vacations this summer- it is getting too expensive with multiple fuel surcharges. The point being that we have hit a wall; our consumption patterns are changing and demand will most likely decrease. On the other side of the coin, why do analysts believe that Chinese and Indian consumers will behave exactly like North Americans? Have they left their glass towers and ever been to China or India? North Americans are huge consumers of energy (gas, oil, water etc.)- much more so than other parts of the world (including equally developed Europe). It stands to reason that it is a huge assumption to make that one North American consumer will equal one Asian consumer in terms of consumption patterns. Yet, analysts seem to believe that consumption per capita should be same when statistics indicate they do not. Yes, oil prices will continue to go up- inflation alone will be responsible for it- but it leaves out the assumption that prices will affect consumption behavior and takes an ignorant approach that everyone will consume in the same manner as North Americans.
2. The price of oil to the price the of natural gas is off its historical ratio. Historically, for every $1 of MMBTU (million British Thermal Unit which is how natural gas is quoted) of natural gas, oil should trade at $6/barrel. In other words, the ratio between the price of oil to the price of natural gas should be 6:1 all things being equal. Natural gas is being quoted at a $12.15 in New York on May 21. Assuming a barrel of oil was approximately $130/barrel that day, the ratio of oil to natural gas prices is approximately 11:1. Just as the abnormal ratio of housing prices increases to rental rate increases pointed to an eventual correction in housing prices, this ratio tends to indicate that oil has either risen too high or natural gas not risen high enough. The issue in Canada is that the easy natural gas supplies are running out in Alberta which explains why natural gas money is moving out of Alberta to British Columbia (the oil royalty regime is a convenient smoke screen to the real problem in Alberta- they are running out of natural gas deposits which are easy to tap). In other words, natural gas has the same supply concerns as oil so why is oil going up so much faster? Perhaps, we have an oil bubble? While the 6:1 ratio can be off for the short-term, just like real estate, it has to come back to historical ratios.
3. Coal- the future of energy?!? Coal gasification and liquefaction are two methods to produce gas or diesel- the biggest side effect being the production of large amounts of carbon dioxide (which supporters claim can be captured underground). The technology isn’t new (the Nazi’s used coal liquefaction when they ran out of fuel in WWII) and coal is certainly in abundance. With the price of oil being what it is, there’s been a revival of coal as a fuel source not just to burn but to produce gas and diesel; Sherritt International Corp., a commodities company with holdings in Canada and Cuba, announced it wants to build a $3 billion coal gasification plant in south-east Edmonton last week (conditional upon the Provincial and Federal government providing clarity on carbon emissions so it could cost the plant properly). Brazil (which, if you have been paying attention, is probably the next big country to watch) has used coal liquefaction for years and China has a lot of coal which it can use rather than conventional oil. The point being that a lot of smart money is already beginning to make bets on other energy sources that are not pie in the sky ideas which will alleviate demand pressures for oil.

If nothing else, I am a realist. Oil will continue to go up. But is $130/barrel a proper valuation right now? Probably not. If you connect enough dots (changing consumer behavior, cheap money with nowhere to place it but in the new “it” industry, historical ratios, where smart money is moving), it appears that oil is over-priced in the short-term. Of course, I could be completely wrong and paying $100 at the pump by the end of the summer but am I paying that because that is the true price of oil or because we are living in an oil bubble?

I have been invited to a wedding next month from a pretty close friend (he doesn’t read this blog- I think). I like going to weddings; weddings have a “this is your life” feel to it (and, if you think about it, the only other time you have a “this is your life” experience is at a funeral) and everyone is always happy at weddings. No, I am not a wedding crasher. Who do you think I am?

But I always get pensive right after I get the wedding invitation. The first question that comes to mind is always “what the heck do I get these people?” especially if they are not on a registry. When people get married in their 20’s that’s an easy question to answer. No one has anything good; our futons were used as couches, our utensil’s a mis-match and we all had about 2 plates to our name (chipped too). When you hit your 30’s though….your friends have nice stuff so what do you get them?

Which always leads to the next question- how much money do you spend on a wedding present? It use to be that $100 was the magic mark in my mind- Eaton’s use to sell silver salt and pepper shakers for $89.99 (wow, I just dated myself making an Eaton’s reference). But, with inflation and the increasing expectations of a consumption society, $100.00 doesn’t buy you what it use to.

What’s the guide anymore? How much do you spend on a wedding present? Or, if you have been married lately, what did you consider an overly cheap present or overly expensive (here’s your chance to complain about Aunt Jackie’s present and use a fake name doing it). Thoughts?

Let’s pretend for a second that Facebook decided it needed other investors besides Microsoft and offered you the opportunity to invest in it. Would you? I am a Facebook user like a lot of my friends even though I am not exactly in Facebook’s prime demographic. I often describe Facebook as either “On-line Booty Call” for users under 25 and “Baby Shots On-line” for users over 25.

If given an opportunity, I would take a pass at investing in Facebook. Why?

1. Facebook has no technological advantage right now which means it will be difficult to differentiate itself over time. This is always the problem with investing in technology; someone will erode your competitive advantage unless you have somehow tied your product with distribution (i.e. Microsoft’s operating systems are installed in approximately 90% of software installed when you buy hardware), bought up the competition (see Thomson) or have grown ubiquitous through ease of use (Google). Facebook is none of these things. In fact, it has a large competitor in MySpace and a lot of other competitors nipping at its heels.
2. Facebook has no natural business niche and it becomes hard to deliver value that way. What is Facebook? A networking site? An advertising medium? A dating site? All of the above? I honestly could not tell you what niche Facebook has carved out for itself that someone has focused on better (the same could be said for MySpace as well). Facebook is the face of Web 2.0 but Web 2.0 is one of those cool terms that doesn’t translate into anything tangible (much like the thankfully forgotten “information superhighway”- what the hell did that mean?). From a business perspective, you need to show to investors you have carved out a niche that no one else can touch and you know how to commercialize that niche (see #4). Google dominates on-line searching and advertising. Craig’s List has replaced traditional newspaper classifieds. Thomson is the source for paid research and analysis in finance, law and accounting. What’s Facebook do better than anyone else?
3. Management is inexperienced and that means it is mistake-prone. Facebook has a 24 year old CEO. Think about when you were 24. You didn’t know what you didn’t know. Although you can be technically gifted at 24, there are nuisances of managing people, dealing with investors and the media and steering a company through growth that you simply cannot gain through a wealth of life experience most 24 year olds have not acquired yet (or not acquired through mistakes in a less public forum). Some believe that this inexperience at the top has lead to a high-handed attitude to the larger Facebook community which has resulted in not enough champions for the product. Remember that Steve Job had just turned 30 when he was fired from Apple. He returned to Apple after more than a decade of life-experience running other businesses and growing more mature. It is not that Jobs became smarter in the intervening period. It is he became more mature and able to manage people better.
4. A lot of hype, very little money. Fortune reports that, despite all its hype, Facebook made a measly $145 million in revenue in 2007 compared to $510 million for MySpace. Facebook hasn’t learned to turn hype into cash. It may want to spend less time hawking itself to the media and more time figuring out how to make money without angering its user base.

I like Facebook. It is a nice application. But, as a company to invest in, I would take a pass.

What about you? Would you take a chance on investing in Facebook?

No, I didn’t fall into a hole this weekend. Through some strange glitch, I got locked out of my own blog (technology 1, Luddite 0). Problem fixed. Back tomorrow to complain about Facebook….

If you believe the media, oil has now hit a price point where it is beginning to change our behavior: we drive less, buy smaller cars, car-pool etc. which means less consumption and a return to some semblance of more normal pricing (one hopes). But the general public continues to pour money into oil stock, having lost its confidence in bank stocks. However, below the surface, the mega-rich are already moving to the next great energy play: wind power. As reported recently, Boone Pickens, who made his billions in oil, has ordered over 600 wind turbines to commence his $10 billion wind farm in Texas. What is particularly interesting is that Pickens hasn’t even secured the right-of-ways for the power lines that will deliver electricity to the grid. That is some bet on wind power when you buy before you obtain government approval.  Warren Buffet is also betting on wind power buying up shares of GE (who produce the wind turbines).

The advantages of wind power are pretty obvious. Wind is ubiquitous. Solar power has limitations if there isn’t a lot of sun. Bio-fuel solves one problem but creates another (have you seen the price of bread lately?). Nuclear is very expensive and what do you do with the waste? Wind power from a business perspective allows the capital costs to be amortized over a long period of time.

Wind power is still a relatively new concept in North America. In Europe, there are large wind farms in-land as well as off the coast. Despite this fact, wind power still continues to constitute a small but growing portion of energy output. As an investment, wind power is one of those “invest early in the trend and wait for it to explode” investments; the rich are patient so they are betting early in the game while prices are still low.

Wind power has its challenges: finding large barren tracts of land is difficult, there are obvious regulatory hurdles (in England, it takes approximately 30 months to bring a wind farm on-line), it is expensive to build out power lines to plug into the grid (remember that wind farms are far away from urban regions so you have to run a lot of power lines a long distance) and the industry doesn’t have the same tax breaks as bio-fuel or oil (yet) to encourage further production.

But, you know what? They said the same thing about the Alberta oil sands 15 years ago and now Alberta is awash in cash.

If you want some ideas for investing in wind power, Jim Cramer gives you some wind power stocks to consider (you know the drill, not a recommendation, please do your own due diligence).

Have a great weekend.

A friend of mine runs a business loaning money to businesses. Every once in a while, he asks me to baby-sit a file for him or to help him interview a potential borrower (I don’t loan the money, my job is to vet the candidates who needs loans if he is really busy and I have some free time- yes, I need a life but, in my defense, it is a good way to learn about businesses). If you sit through enough loan interviews and hear enough stories of why a business needs a loan, you begin to pick out a discernible pattern between the desirable borrowers, the undesirable and the “not on your life” borrowers. With lenders increasingly tightening loan criteria, to the extent that the student loan market has nearly collapsed in the United States, what are some things to avoid if you are looking for a loan of any kind beyond the obvious factors such as bad credit score, no documentation etc.?

• “I would like you to loan me a lot of money based on the fact I am nice/the business idea is great but I will put no money in it myself.” Lending is the management of leveraged risk (remember that lenders have lenders too so they are leveraging themselves). The best way to mitigate lending risk is to make sure the borrower shares in the risk by putting in their own money (aka “skin in the game”). If you put no skin in the game, you are telling the lender you have no confidence in yourself or the business (put your money where your mouth is). Even a token contribution from a borrower with little assets goes a long way to showing a lender you are willing to share the risk. One of the few situations I know of where the borrower doesn’t have to put any meaningful skin in the game is the 40 year mortgage and these are walking car-crashes for lender and borrower alike.
• “Sorry, you have the wrong lender…” Make sure you target the appropriate lender. This sounds patently obvious but not all lenders are built equally. The quick and dirty on loan sources are:

• Credit Unions: Good for personal and small business loans; not the best source for larger commercial loans
• Banks: They like loans where there is a lot of collateral. For example, historically, mortgages or commercial real estate and RSP loans. Like unsecured lines of credit and credit cards. Hate student loans, small commercial loans (unless backed by the government). Each bank also has their specialty.
• Private lenders: Typically, higher risk borrowers with sufficient collateral (a 2nd mortgage on an appreciating home or rental property).
• Angel investors/venture capitalist: High flying businesses which have the chance of going public.

• Bad Attitude. Lenders are people too. You may look great on paper but if you have a bad attitude, there is a disincentive to lend money to you. If you are difficult to work with now, and the money hasn’t been even loaned, what happens if you fall behind on payments? I know lenders who may have rejected a borrower but because they had a good attitude, actively helped them find another lender.
• Unreliability. Your parents were right. If you keep moving jobs, cities and spouses (!?!), you look like a flight risk and less likely to get a loan (not to mention all the neighborhood gossip your parents have to deal with arising from your fickle ways).
• “I need cash quick” Total red light for a lender. Why do you need cash so quickly- who or what are you running from?

Good luck with obtaining a loan.